Community Bankers of Iowa Monthly Banker Update October 2013 | Page 13

Consumer Financial Protection Bureau Finalizes Modifications to
Mortgage Rules
Changes Resolve Implementation Issues and Clear the Way for Better
Consumer Protections
The Consumer Financial Protection Bureau (CFPB) has finalized
amendments and clarifications to its January 2013 mortgage
rules in order to help industry comply and to better protect consumers. The changes made today answer questions that have
been identified during the implementation process.
“Our mortgage rules were designed to eliminate irresponsible
practices and foster a thriving, more sustainable marketplace,”
said CFPB Director Richard Cordray.

nator.
• Clarify the points and fees thresholds and loan originator
compensation rules for manufactured housing employees.
• Revise effective dates of many loan originator compensation rule provisions: The new rule changes the effective
date for certain provisions of the rule to January 1, 2014,
in order to simplify compliance since compensation plans,
training, and licensing and registration are often structured
on an annual basis.

The final rule is intended to clarify interpretive issues and faciliThe Bureau has published a Regulatory Implementation webtate compliance. Among other things, the modifications:
site, which consolidates all of the new 2013 mortgage rules and
• Facilitate lending in rural or underserved areas: Some of
related implementation materials, and can be found at: www.
the Bureau’s mortgage rules contain provisions applicaconsumerfinance.gov/regulatory-implementation
ble to certain small creditors that
operate predominantly in “rural” or
“underserved” areas. The Bureau
recently announced that it would
reexamine the definitions of rural
or underserved over the next two
years.
• Clarify what servicer activities are
prohibited in the first 120 days of
delinquency: Under the final rule,
servicers will be allowed to send
certain early delinquency notices
required under state law to borrowers that may provide beneficial
information about legal aid, counseling, or other resources.
• Outline procedures for obtaining
follow-up information on loss-mitigation applications:
• Facilitate servicers’ offering of
short-term forbearance plans:
The modifications make it easier
for servicers to offer short-term forbearance plans for delinquent borrowers who need only temporary
relief without going through a full
loss-mitigation evaluation process.
• Clarify best practices for informing
borrowers about the address for
error resolution documents: The
new rule provides more specificity
on how to inform borrowers about
the address by listing it on certain documents, such as an initial
notice and a periodic statement or
coupon book if applicable.
New Look. Same Wisdom.
• Make clarifications about financing of credit insurance premiums:
The Bureau’s loan originator
compensation rule adopted the
Dodd-Frank Wall Street Reform
BOLI & Deferred Compensation Experts
800.780.4EBN
ebn-design.com
and Consumer Protection Act’s
prohibition on creditors financing credit insurance premiums in
connection with certain mortgage
©2013 EBN
transactions.
• Clarify the definition of a loan origi-

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